A Magazine for airline executives 2011 Issue No. 2

Taking your airline to new heights

The Jewel A Conversation With … Muhammad Ali Albakri, Chief Information Officer, Saudi Arabian Airlines, Pg. 24

18 Limited adopts a variety of 40 The European Commission invests in 56 The most successful airline connects it’s entire new technologies modernized air traffic management organization, end to end system The Jewel

By Stephani Hawkins | Ascend Editor ASCEND I PROFILE

audi Arabian Airlines found its wings in 1945 when U.S. President Franklin D. Roosevelt gave a twin-engine DC-3 (Dakota) HZ-AAX to Saudi Arabia King SAbdul Aziz as a gift. The single aircraft was used to carry passengers and cargo between Riyadh, Jeddah and Dhahran. Within months, two additional DC-3 Dakotas were purchased, and the new airline, thought of by many as “The Jewel Of The Middle East,” began its journey to becoming one of the world’s largest airlines. Like most airlines that have been around for more than half a century, has a rich history that paved the way to long- term success. Inch by inch, year by year, the Middle East-based carrier added new aircraft, expanded its route network, grew a loyal customer base and earned a strong position in the aviation industry. During its 66 years of service, the airline has earned more than 50 awards that speak volumes about its commitment to providing outstanding service to the traveling public. Among them are the Diamond Award for onboard services for passengers with spe- cial needs, the Emerald Award for excellent food service and the Sapphire Award for excellence in sky sales — all from On Board Services Magazine; Award for Performance, Quality and Service; Excellent Quality Award from for Best Caterer and in recognition of Excellent Service Standards; and, most recently, the Yahoo! Middle East Online Award for Best Regional Online Marketing. Top service standards and outstanding marketing efforts merely scratch the sur- face. Saudia places great emphasis on keeping the Saudi Arabian economy strong and the country’s residents employed. Saudia and the Kingdom’s Ministry of Higher Education reached an agreement whereby Saudia will take advantage of the Ministry’s scholarship program to allocate 100 scholarships for Saudi nationals for aviation studies abroad, ending with certi- fication and guaranteed jobs flying Saudia aircraft. Fifty students have already begun their studies, and the other 50 will start next year. The airline has also been extremely active in pursuing opportunities whereby its own employees have been able to join a government-sponsored scholarships pro- gram (H. M. King Abdullah Scholarship Education Program) for masters and doc- torate degrees in various sciences and management fields. In October 2010, the carrier’s Saudia Aerospace Engineering Industries Company signed an agreement with the Human Resource Development Fund to train 100 Saudis to work in the aviation industry. This

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is nothing new to Saudia. Since 1964, the specific trainees selected, and what impact Education, the scholarship program of H.M. airline has played a significant role in the do these efforts have on employment rates King Abdullah for bachelor and higher edu- training and employment of Saudis. and the overall economy in the region? cation abroad, and the recently unveiled That year, it sent 30 of its nationals to the Answer: As a matter of fact, Saudia has program to select and accept candidates to United States to learn about maintenance always been on top of the list in terms of be enrolled in an 18-month training program of aircraft engines and to study aeronautics. training and human capital development. for the benefit of front-line requirements. During the past five decades, the carrier Throughout the years, Saudia sponsored, All these means are in the heart of our has sent more than 5,000 Saudis for higher financed and executed numerous training continuing efforts to ensure that our human studies and training. programs, capitalizing on the availability of capitals are ready for the “changes” and The airline, which today operates 139 young population and a supportive govern- capable to deliver. aircraft, will acquire 82 of the industry’s ment posture. Q: Saudia seeks to become a five-star latest aircraft from manufacturers Airbus Whenever a new program is unveiled, airline. What type of service enhancements and Boeing as part of its strategic plan to it comes with a complete governance pro- will support this objective? How will employ- modernize its fleet. In November 2010, gram whereby the entire process from ees directly contribute to reaching this goal? it signed a contract with Boeing for 22 advertisements to acceptance and hiring A: Through a strategic “change” program new 777-300 ER and eight 787 Dreamliner are carried out in accordance to rules called the “TAKE OFF PROGRAM,” there aircraft. A month earlier, Saudia received and guidelines approved by top executive are numerous human capital development delivery of its first of 15 ordered Airbus committees that normally include human projects that focus on training, providing A321 aircraft, and it has already received resources, corporate training and the ben- specific skills and hiring highly qualified most of the Airbus A320s and started to eficiary divisions, and the chairmanship of people with potential to empower the mas- receive the A330s. the president of the airline. Saudia does sive change being pursued. The majority of the aircraft will be not reinvent the wheel … rather we apply In all customer touch points, employees’ used as part of a program to rationalize internationally accepted criteria and subject roles and responsibilities are being rede- domestic services and increase seating candidates to evaluation and assessment fined and clarified, and focused training capacity by 20 percent. Another initiative programs that are well recognized in the programs are being executed to upgrade is currently underway for the acquisition of aviation industry and the space of training/ skills and equip employees with the needed another large order (50 Airbus and Boeing human development. competencies to provide consistent ser- aircraft) to be added yet to its fleet, which Saudia is spearheading many human vices to our customers. is becoming streamlined and aligned with development and training programs for This, of course, is being aided by rolling the new strategy for the airline’s route multiple specialties and through different out incentive programs, potential career- network. means such as the “Future Pioneers” pro- development programs for top performance Aligned with the airline’s superior gram where a large number of college and a continuing recognition effort by customer service standards, passengers graduates have been selected and enrolled Saudia’s top executives. aboard the Airbus A330s can now use in a two-year intensive training/OJT pro- Q: Once Saudia reaches five-star status, mobile phones and the Internet during gram, the Pilots training program with a what steps will be taken to ensure it main- flight without impacting the aircraft’s sys- scholarship from the Ministry of Higher tains this status or excels beyond? tems — one of many benefits the modern fleet affords the carrier and its travelers. A member of the Arab Air Carriers Organization, Saudi’s national flag carrier serves 121 cities around the world and has codeshare agreements with several airlines, including , , , Mahan Air and . In January, Saudia forged ahead in a codeshare agreement with -KLM, making it a ripe candidate for entry into the global SkyTeam alliance. Leading Saudia’s information technol- ogy division, Chief Information Officer Muhammad Ali Albakri has been imple- menting an IT master plan to support its many current and upcoming initiatives and help drive the airline’s bottom-line success. In a recent interview with Ascend, Albakri discussed some of the carrier’s key strate- gies and attributes that make it a true jewel in the Middle East.

Question: In October 2010,

Saudia Aerospace Engineering Industries Photo: Airbus Company, owned by parent Saudia, signed an agreement with the Human Resource Development Fund to train 100 Saudis to Airbus Orders In June, Saudia placed a firm order for four additional Airbus A330-300 aircraft in work in the aviation industry. How are these addition to the eight ordered in July 2008, bringing the total order for the type to 12.

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A: The massive changes being introduced network strategies will be augmented by status issue. It is a necessity brought into the airlines are not short-term strate- the bilateral agreements with all members forward by our loyal and anticipating pas- gies but rather long-term strategic goals of the alliance and will benefit Saudia’s sengers, and Saudia’s assessment was very that are linked to a sustainable business frequent flyer members as well as business- positive in this regard. model. Everything that is being done today and first-class travelers to take advantage of Q: To become profitable, Saudia must is deeply rooted to build for the future. a wide spectrum of benefits offered by the increase revenues, reduce costs and Saudia efforts to join the SkyTeam alliance alliance. Sharing passengers’ lounges and increase efficiency. What is your strategy and its continuing efforts to maintain its facilities across the world will help Saudia behind this goal? accreditation with ICAO, IOSA, ISO9000, offer better services at reduced costs. A: Saudia’s privatization program recog- FAA, IATA, etc., will certainly keep the Q: What attracts you to SkyTeam versus nized that once fully privatized, the airline “passion” going to achieve even more and competitor alliances Star and oneworld? must increase market share, ensure growth not just accept the staus qou. A: Saudia conducted many studies and reduce costs to offset the government Q: How do you communicate with your before finally deciding on SkyTeam with subsidies we currently enjoy. customers to measure Saudi’s success in major benefits to expand our redesigned Growth is a must to help enable Saudia terms of passenger satisfaction? How do pay for all these massive change programs you obtain customer feedback and input to that include spending hundreds of mil- determine areas that require improvement? Highlight lions of U.S. dollars investing in new fleet, A: There are numerous programs that upgrading services and transforming its have recently been upgraded to seek cus- The newly acquired and infrastructures and systems worldwide. tomers’ feedback. For instance, customers Q: What other steps will be taken to can provide their feedback online through upgraded infrastructure improve the financial status of the airline? the onboard interactive entertainment sys- A: Saudia’s sales strategies are focused tem, a systematic program to randomly on a self-service, low-cost model of pick a number of passengers from flights and applications systems providing products and services to our pas- and conduct a telephone interview with sengers. All of our services that are offered them. We also have website feedback and are considered to be through our city ticket offices and airport communications pages with our customers. ticket offices are now possible through our Moreover, recent efforts are well second to none and have online portals and soon through our mobile underway to establish a dedicated and services platform; thereby, reducing the well-equipped state-of-the-art customer dependencies on man power and expensive services call center to be available 24x7 paved the way to imple- traditional models. where customers can reach the center by Saudia has also introduced additional call phone and talk to agents who have access ment a large number of centers/customer services through other to all frontline systems. This allows agents prominent service providers in the Kingdom; to capture customers’ needs and act upon the new business strate- thereby, offering many more services to a fulfillment in a timely and professional wider base with less capital investments. manner. gies and vision. Saudia is pursuing a consolidation pro- Q: What are some of Saudia’s strengths gram where all our major core services are that set it apart from its competitors? being aligned and consolidated with fewer A: Saudia’s long-established history as — Muhammad Ali Albakri, suppliers to achieve scale of economy and the flag carrier and the leading airlines of chief information officer, Saudia leverage with suppliers. the Middle East is an asset that will always Most importantly, Saudia’s hundreds of play to Saudia’s benefit. Saudia’s history and millions of dollars of investment in new long standing as the nation carrier has the front- and back-office application systems required experience, maturity of services, network in areas where we could not and infrastructure were designed to intro- ability to launch new programs, attachment cost-effectively compete with local airlines duce efficiencies and streamlineprocesses, to the very fabric of the Saudi society and such as in Europe and North America. which has already started to positively reduce the Muslim world. We understand what our The alliance members will enable Saudia our overall costs. travelers need whether they are business to strengthen its offerings in areas where Saudia is also finalizing a complete travelers, vacationers, students, religious we could not “consistently” offer services ancillary services programs that will help travelers or government officials. We cater and will provide our travelers a wide spec- generate more revenue. to a wide spectrum of needs and desires, trum of choices to reach final destinations. Q: As part of its efforts to modernize and we have the depth and breadth of expe- Moreover, SkyTeam has no Middle East- its fleet, Saudia signed a major deal to rience to adapt and evolve as our market based carrier as a member, and that was purchase 82 Airbus and Boeing planes — base evolves. another attractive advantage for Saudia. including 15 Airbus 321s. In what ways will Q: Saudia plans to join SkyTeam alliance. Q: Why are partnerships with other air- a more modern fleet help the airline return In what ways will joining a global alliance lines critical to the success of Saudia? to profitability? benefit your airline, its employees and its A: Today’s travelers have numerous A: A new fleet means less maintenance customers? needs and expectations, and providing ser- and thus less cost, less schedule disruption A: Joining SkyTeam is a win-win situ- vices was the first step of offering flexible by technical problems and more opportunity ation where Saudia will fill in a need for schedules and routes where our passengers to offer new products and services to our the alliance and meanwhile Saudia will can choose times, dates and connecting growing customer base. Having the new benefit from expanding its reach into North airports with much more flexibility and in fleet has also allowed us to redesign our America, South America, the European a cohesive manner of making bookings. routes and schedules with more frequent continent and the far east. Saudia’s new Joining the alliance is not a luxury or a non-stop flights to more destinations than

ascend 27 28 Boeing foreight787Dreamlineraircraft. Eight DreamlinersAspartofitsstrategicplantomodernizefleet,Saudiahassignedacontractwith in puttingtogethertheIT master plan? optimize itsoperation.What wasinvolved maximum use of its new IT systems to tion technologymasterplan andmake solutions inaspeedymanner. tom linebyreducingcostsandintroducing needed efficienciestoincreasethebot- line toenablegrowthandfacilitatethe strategies withstrongfocusonthetop and allowITtoalignitselfwithbusiness technologies bringbusinessenablement investments. a veryshorttimetomarketandless services canberolledoutrapidlywith technology, commercialproductsand systems andintegrationplatforms.With been possiblepriortoupgradingour tions. JoiningSkyTeam wouldn’t have and serviceswithmuchlesscomplica- swiftly introducecompetitiveprograms and therestructureofairline. Saudia. Theothertwoarethenewfleet three majorpillarsfortheredefinitionof ture and applications is consideredone of overall successofyourairline? and reducingouroveralloperationalcosts. ly contributingtotheenvironmentalfactors reduce ourfuel-burnrate;thereby, positive- ever before.Thenewfleetwillalsohelp ascend

Photos: Shutterstock ASCEND Q: Moreover, advanced andmodernized With new flexible systems, Saudiacan A: TheupgradeofSaudia’s infrastruc- Q: What roledoestechnologyplayinthe Saudia willimplementaninforma - I PROFILE the newplatformsareproviding arare business processmanagement where development and/orchanges. reduced timeandinvestment insystem possible withlesscomplications andmuch changes andcustomers’needsarenow The abilityofairlinestoreactmarket have therightinformationwhenneeded. enterprise andenablingdecisionmakersto information fromthe front line across the ways ofcommunicatinginternally, sharing Such systemsarenowprovidingadvanced best industrypractices and processes. but ratherconsideredasameanstoinstill not considered mere technology upgrades and vision.Theimplementedsystemsare number ofthenewbusinessstrategies have pavedthewaytoimplementalarge considered tobesecondnoneand structure andapplicationssystemsare sponsors involvement. management engagementandbusiness program that has ensured continuing president andhasacompletegovernance sponsored andsupportedbytheairline’s the restructureofairline).Theplanis privatizing non-corebusinessunitsand initiatives mentionedpreviously(newfleet, in conjunctionwiththeotherstrategic mum useofthenewsystems? What stepswillbetakentoensuremaxi- We havecontinuingeffortsbasedon The newlyacquiredandupgradedinfra- A: TheITmasterplanwasdeveloped

Photo: Boeing support yourtechnologystrategy? core ITprocessesandorganizationto achieving growthandreducingcosts. airline towardimprovedcustomerservices, to supportthegoalsandobjectivesof that allnewcapabilitiesareactuallyapplied will continuetobeexertedmakecertain deliver optimalbusinessvalues.Efforts their truevaluesandtoensurethatwe under assessmenttoensureleveraging these newplatformsarecontinuouslygoing have institutionalizedaprogramwhereby alignment. We ininformationtechnology their procedurestoensuresimplicityand sider theirbusinessprocessesandredesign opportunity forbusinessownerstorecon- and ITgroups. roles and responsibilities amongbusiness ment thatensuresspecializationandclear the linesofdemandandsupplymanage- between thebusinessunitsandITalong regulate andstreamlinetherelationship nance programhavebeenestablishedto enterprise. major sharedserviceprovideracrossthe replication; thereby, IThastrulybecomea been setuptoeliminateredundanciesand business toalltheunitsbuthas clients aswell.ITisconsidered“core” for the Saudia group but also for external whereby serviceswillbeprovidednotonly independent unitundertheSaudiaholdings Saudia tospinoffITbecomeatotally The organizationisasteppingstonefor products asasharedITserviceprovider. setup allowsITtoprovideitsservicesand reorganization ofITwherebythenew process frameworkandgovernancemodel. development anddeploymentofanewIT of theITdivision,andsecondwas other aspects.Onewasthereorganization by theITmasterplanactuallyincludedtwo years? centric, multi-productsairline. one andonlyservice-oriented, customer- ered strongreasonsforSaudia tobethe the regionareallfactorsthat areconsid- tourism infrastructureinthe countryand with thehugeinvestmentsin IT, airportand being thecenterofholymosquesalong Middle East. rightful statusastheleadingairlinein the alliance),willmostdefiantlyregainits pletely redesignednetworkandjoining and applicationsystem(alongwithacom- upgrades ofitsfacilities,infrastructure products, fleetmodernizationinvestments, improvement programs, customer-centric Q: The newITprocessmodelandgover We havesuccessfullyfinalizedthe A: Thetransformationbroughtforward Q: Our uniquegeographicallocationand A: Saudia,throughitsaggressiveservice What changeswillbemadetoyour Where doyouseeSaudiainfive a -